Nonprofit Law Matters

Martha B. Lackritz-Peltier

Posts by Martha B. Lackritz-Peltier

Congress Missed a Valuable Opportunity: Greg Colvin and Others Discuss Congress’ Refusal to Fund Regulations on Section 501(c)(4)

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

On February 8, Tax Analysts published an article titled Confusion Over Judging Political Activity Still Reigns at IRS.  In the article, Paul C. Barton describes the prohibition that appeared in the 2016 Consolidated Appropriations Act against using any fiscal year federal funds “to issue, revise, or finalize any regulation, revenue ruling, or other guidance …… Continue Reading

New Year, New Ventures: Keeping Up With Charitable Sales Promotions

Posted in IRS, FTB & Attorney General Controversies, Public Charities, Revenue Generating Activities

Readers may remember our blog post from 2012, Are You in a Commercial Co-Venture?, in which we described common scenarios that trigger state requirements for charities and companies engaged in commercial co-ventures (also known as charitable sales promotions, or cause marketing).  Over the years, we have seen the popularity of such ventures continue to rise,… Continue Reading

FASB Proposes Significant Changes to Nonprofit Accounting Standards

Posted in Charitable Gift Planning, Private Foundations, Public Charities

The Financial Accounting Standards Board (“FASB”) recently issued a Proposed Accounting Standards Update (“ASU”) specific to Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954).  The ASU seeks to improve net asset classification reporting requirements, as well as require expanded information on liquidity, financial performance, and cash flow.  The full scope of proposed changes… Continue Reading

Fiscal Sponsorship Survey Seeks Responses by May 8th

Posted in Grantmaking & Social Investing, Nonprofit Network Affiliations, Nonprofit Structures, Relationships & Transactions, Public Charities

The National Network of Fiscal Sponsors (NNFS) has released a new field survey designed to gather current, relevant information on organizations engaged in fiscal sponsorship.  Click HERE to complete the survey no later than May 8, 2015. We encourage all fiscal sponsors to participate in the survey to ensure that the resulting report represents a… Continue Reading

IRS FY 2014 Data Book Reveals Dramatic Increase in Exempt Organization Approvals

Posted in AG, IRS, FTB, & Property Tax Proceedings, Formation & Tax Exempt Status, Public Charities

Last week the Internal Revenue Service released its Fiscal Year 2014 Data Book, reporting on IRS operations, enforcement, revenue collection and related activities during the period of October 1, 2013, through September 30, 2014, (the IRS fiscal year).  The Data Book included a table on “Closures of Applications for Tax-Exempt Status, by Organization Type and… Continue Reading

New Year’s Treasure? AB 1712 Clarifies that Nonprofits May Claim Unclaimed Property of Certain Dissolved Affiliates in California

Posted in Nonprofit Structures, Relationships & Transactions, Private Foundations, Public Charities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

This past August, Governor Jerry Brown signed into law AB 1712, which amends the California Code of Civil Procedure to clarify that certain nonprofit organizations whose affiliates have dissolved may claim the unclaimed property of those dissolved entities under the state’s unclaimed property system. Unclaimed Property Law in California California’s Unclaimed Property Law provides a… Continue Reading

New Political Rules for 501(c)s in March 2015?

Posted in Public Charities, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

We daren’t get our hopes up, but… We heard through the grapevine that March 2015 is the release date for a second round of proposed rulemaking concerning Section 501(c) regulations relating to political campaign intervention.  Indeed, an online calendar at the Office of Information and Regulatory Affairs at the Office of Management and Budget now… Continue Reading

Do’s & Don’ts: Public Charities in an Election Year

Posted in Public Charities, Tax Treatment of Lobbying & Political Activities

You’re a public charity.  Maybe you’re brand new; or maybe you’ve existed for years but suddenly have an issue your constituents need to know about on the ballot this year.  Maybe one of your Board members is a candidate for elective office.  Maybe you’d like to host a debate.  Maybe you want to register your… Continue Reading

Revised Rules on 501(c)(4)s and Political Activity Expected in Early 2015

Posted in Public Charities, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

Earlier this week, IRS Commissioner John Koskinen explained in an interview with the Center for Public Integrity that the IRS expects to complete revised proposed regulations defining political activity for 501(c)(4) (and possibly other types of 501(c)) organizations by early 2015.  The Center for Public Integrity reports that Koskinen elaborated on the nature of the… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #1 — American Bar Association Section of Taxation

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“Promulgating regulations with clear rules regarding political intervention or candidate-related political activity could help the government to avoid constitutional attacks on the grounds of vagueness. . . . Such regulations are not unconstitutional.  Quite the contrary, they help remove doubts as to the constitutionality of Service guidance in this important area.” Our countdown closes with… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #2 — Bright Lines Project

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“We don’t want a bad political definition for 501(c)(4) organizations, rather we want a good definition for everybody.” So, we admit to a bias on this one.  Greg Colvin is chair of the Bright Lines Project (“BLP”) Drafting Committee, whose nine members include Rosemary Fei, also a principal in our firm.  Having said that, here… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #3 — Center for Responsive Politics (OpenSecrets.org)

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“Over the last four election cycles, the amount of spending by 501(c)(4) social welfare organizations in particular has grown dramatically.  In 2006, just $1.3 million in political spending was reported to the Federal Election Commission (FEC) by 501(c)(4) organizations, while by the 2010 cycle, that total had risen to $92 million.  In 2012, the number more than… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #4 — NAACP and NAACP-National Voter Fund

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“ . . . much of the work that the NAACP did in the early years to combat racial discrimination in the administration of our nation’s voting laws would be illegal under the proposed regulations.” The concise and eloquent comments by the NAACP and its 501(c)(3) affiliate, the NAACP-National Voter Fund, are among the most… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #5 — American Institute of Certified Public Accountants (AICPA)

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“The confidence of exempt organizations, tax preparers, and the public, in the enforcement of tax laws, is diminished when the application of these laws [is] unclear or difficult to understand.” The AICPA is the world’s largest member association representing the accounting profession, with more than 394,000 members in 128 countries and a 125-year history.  Their brief… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #6 — Independent Sector

Posted in Public Charities, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“We encourage the IRS to engage tax-exempt organizations in a meaningful dialogue to address the many concerns expressed during this comment process, and provide the public an opportunity to provide input on a revised proposed rule that better defines permissible political activity while preserving the important advocacy role and vital voice of tax-exempt organizations in… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #7 — American Civil Liberties Union

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

 “ . . . we urge the Service to abandon both the approach in the proposed rule and the existing ‘facts and circumstances’ test.  We respectfully submit that the Service needs to offer a clear and easily interpreted rule on what constitutes express advocacy and a firm answer on how much such activity will result… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #8 — Alliance for Justice

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“AFJ strongly believes that the proposal in the NPRM to redefine the meaning of ‘social welfare’ activity so as to exclude certain nonpartisan election-related activity goes beyond the statutory authority provided by Congress and will deter a wide-array of legitimate activity which has long-been recognized as promoting the general welfare of the community.” Alliance for… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #9 — Bipartisan NPRM Comments

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“The proposed rules treat as political a host of activities that are now and should continue to be defined as non-political, rather than discarding years of IRS rulings, guidance and precedent . . . .” The variety of organizations that signed on to these brief comments attests to the widespread dissatisfaction with the proposed rules.  The comments were developed… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #10 — Ottinger Foundation, The Leonard and Sophie Davis Fund, and The Woodbury Fund

Posted in Private Foundations, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

 “[T]he proper course for the IRS is ‘to mend it, not end it.’” The comments submitted by these three family foundations (Ottinger Foundation, The Leonard and Sophie Davis Fund, and The Woodbury Fund) elegantly reflect the concerns of grantmakers that fund nonpartisan voter education, as well as charities seeking to “curb the corrupting influence of… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #11 — The Trade Association Perspective

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“Given that any rule adopted for 501(c)(4) entities pertaining to political activity could be applied by the IRS and tax law practitioners by analogy (if not directly) to other tax-exempt organizations, the adoption of the proposed rules would severely restrict the advocacy and civic activities of 501(c)(6) trade associations … undermining their core purpose.” —… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #12 – Tax-Exempt Organization Attorneys

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“Each of us in our respective practices representing 501(c) organizations is all too familiar with the problems related to existing law and guidance on exempt-organization political activity. ….  Because the law itself is not clear, we often find ourselves unable to give our clients the clear answers they seek and should reasonably expect.” 21 prominent… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #13 — Center for Competitive Politics

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“A rule should respect Supreme Court precedent, comport with the Internal Revenue Code, provide clear guidance, be simple to understand and implement, and provide for equitable enforcement.” The Center for Competitive Politics submitted thorough comments that address multiple constitutional concerns, and include their very own proposed rules for consideration by the IRS.  CCP’s rules outline… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #14 — Funders’ Committee for Civic Participation

Posted in Private Foundations, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“The revised proposal should apply universally to all tax categories and make clear that nonpartisan civic engagement is not considered political activity.” The Funders’ Committee for Civic Participation (FCCP), an Oregon-based coalition of grantmakers, provides a concise summary of the overarching dangers of adopting the proposed rules in their current form.  FCCP’s focus is on… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #15 — FEC Commissioners

Posted in Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

We take this opportunity to combine two very different comments, both from members of the Federal Election Commission. Three (Republican) FEC Commissioners “In our experience, both as FEC Commissioners and in our previous roles as counsel to participants in the political process, we cannot emphasize enough the need to comply with the congressional call for… Continue Reading